Search found 6602 matches

by Doc
Sat Dec 03, 2016 10:13 am
Forum: Investing - Theory, News & General
Topic: Adding SCV Tilt...placement and fund choice
Replies: 10
Views: 855

Re: Adding SCV Tilt...placement and fund choice

Small-cap value ETFs are reasonably tax-efficient, but I would expect them to be slightly less tax-efficient than Total Stock Market or Total International, and more tax-efficient than large-cap value ETFs. Thus, if you have the choice, it is better to put small-cap value in tax-deferred, but you m...
by Doc
Sat Dec 03, 2016 10:02 am
Forum: Investing - Theory, News & General
Topic: Vanguard Short Term TIPs fund: Risk vs. Reward and deflation
Replies: 69
Views: 3587

Re: Vanguard Short Term TIPs fund: Risk vs. Reward and deflation

Doc wrote: The blue line is the 5 yr break even. Does anyone belive that the market was predicting a 2% deflation rate in the last part of the year? I'm not sure what the market was predicting for inflation. It would not surprise me that the market was predicting more negative inflation than actual...
by Doc
Thu Dec 01, 2016 12:24 pm
Forum: Investing - Theory, News & General
Topic: What is a "standard" Small Cap tilt portfolio
Replies: 35
Views: 2809

Re: What is a "standard" Small Cap tilt portfolio

In 1998, in The Only Guide to a Winning Investment Strategy You Will Ever Need, Larry Swedroe suggested ... In his more recent book he is even suggesting 100% small/value but read the book. He is also changing his equity/fixed income to compensate. The idea is to cut the tails on the variance while...
by Doc
Mon Nov 28, 2016 2:10 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Short Term TIPs fund: Risk vs. Reward and deflation
Replies: 69
Views: 3587

Re: Vanguard Short Term TIPs fund: Risk vs. Reward and deflation

Before making any decisions on TIPS performance during '08 take a look at this chart. The blue line is the 5 yr break even. Does anyone belive that the market was predicting a 2% deflation rate in the last part of the year? https://fred.stlouisfed.org/graph/fredgraph.png?g=bVHI For those of you that...
by Doc
Sat Nov 26, 2016 1:30 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Short Term TIPs fund: Risk vs. Reward and deflation
Replies: 69
Views: 3587

Re: Vanguard Short Term TIPs fund: Risk vs. Reward and deflation

A lot of the discussion here and on other FI threads, use the phrase "if held to maturity" but many investors and probably most bond funds sell there bonds before maturity. Morningstar and Vanguard are reporting Vg's short term TIPS fund to be all 1-5 years. Less than one year - zero. Thi...
by Doc
Sat Nov 26, 2016 12:15 pm
Forum: Investing - Theory, News & General
Topic: Bonds in Taxable
Replies: 150
Views: 10170

Re: Bonds in Taxable

sperry8 wrote:These articles discuss Roths. Would the same advice be given for IRAs?

If you adjust for the fact that an IRA is pretax money and the ROTH is after tax money they are exactly the same if your tax rate does not change. So the answer is yes since even if there was a tax change effect it is unknowable.
by Doc
Sat Nov 26, 2016 12:11 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Short Term TIPs fund: Risk vs. Reward and deflation
Replies: 69
Views: 3587

Re: Vanguard Short Term TIPs fund: Risk vs. Reward and deflation

Reuters wrote:UPDATE 4-U.S. crowds pick up slightly on Black Friday, online sales jump
by Doc
Sat Nov 26, 2016 12:09 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Short Term TIPs fund: Risk vs. Reward and deflation
Replies: 69
Views: 3587

Re: Vanguard Short Term TIPs fund: Risk vs. Reward and deflation

longinvest, My point was just that most funds do not hold bonds to maturity. This thread is addressed at a TIPS fund . Using bonds held to maturity is apples to oranges or maybe at the short end Mandarins to Californians. If you want inflation protection no matter what use 4 week T-bills. Easy to bu...
by Doc
Sat Nov 26, 2016 11:54 am
Forum: Investing - Theory, News & General
Topic: Vanguard Short Term TIPs fund: Risk vs. Reward and deflation
Replies: 69
Views: 3587

Re: Vanguard Short Term TIPs fund: Risk vs. Reward and deflation

I was simply comparing a normal rolling bond ladder to a normal index fund. "Normal" index funds don't hold bonds to maturity. If it's a 1-x fund the return is probably close to a 0-x ladder as you said. If x is long or the fund is a 3-x or a 5-x fund the difference gets bigger. Trying to...
by Doc
Sat Nov 26, 2016 11:30 am
Forum: Investing - Theory, News & General
Topic: Vanguard Short Term TIPs fund: Risk vs. Reward and deflation
Replies: 69
Views: 3587

Re: Vanguard Short Term TIPs fund: Risk vs. Reward and deflation

The impact of selling bonds one year prior to maturity is mild, if I am to believe the simulations of our bond fund simulator. Actually, selling bonds at the time they become more or less equivalent to cash instruments tends to increase returns by not keeping money invested at cash-like yields. The...
by Doc
Sat Nov 26, 2016 8:29 am
Forum: Investing - Theory, News & General
Topic: Vanguard Short Term TIPs fund: Risk vs. Reward and deflation
Replies: 69
Views: 3587

Re: Vanguard Short Term TIPs fund: Risk vs. Reward and deflation

A lot of the discussion here and on other FI threads, use the phrase "if held to maturity" but many investors and probably most bond funds sell there bonds before maturity. Morningstar and Vanguard are reporting Vg's short term TIPS fund to be all 1-5 years. Less than one year - zero. This...
by Doc
Fri Nov 25, 2016 6:35 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Short Term TIPs fund: Risk vs. Reward and deflation
Replies: 69
Views: 3587

Re: Vanguard Short Term TIPs fund: Risk vs. Reward and deflation

Liquidity issues certainly could cause issues for longer term TIPs in a deflation scenario. There will be a tug of war between falling interest rates and falling inflation expectations with respect to TIPs pricing. When Lehman collapsed in 2008, the dumping of their TIPs portfolio on the market tri...
by Doc
Fri Nov 25, 2016 11:22 am
Forum: Investing - Theory, News & General
Topic: "Preliminary Capital Gains Estimates"
Replies: 3
Views: 777

Re: "Preliminary Capital Gains Estimates"

Mutual funds and exchange-traded funds (ETFs) typically distribute taxable capital gains to shareholders each December. Below is a list of Vanguard funds and ETFs that are expected, as of October 31, 2016, to distribute taxable capital gains in December 2016. To estimate your distribution for a fun...
by Doc
Sun Nov 20, 2016 3:17 pm
Forum: Investing - Theory, News & General
Topic: Why are bonds dropping? They are supposed to be safe.
Replies: 171
Views: 19366

Re: Why are bonds dropping? They are supposed to be safe.

If you think "gubmint-guaranteed" CDs are risk free, then you still don't understand your investment choices. 1) FDIC is not the "guv". (But Almost.) 2) FDIC only insures principal and accrued interest. Not future interest. This may seem like a nit to you youngins that weren't a...
by Doc
Sat Nov 19, 2016 8:18 pm
Forum: Investing - Theory, News & General
Topic: Adding to Small Cap
Replies: 12
Views: 1412

Re: Adding to Small Cap

Do you blindly invest in an asset class if it hits a rebalancing band? If an asset class hits a rebalance band, that means another in your AA must have also hit that band. How is that blindly investing in one, if it's your plan to do so when rebalance bands are hit? Seems like that would be a plann...
by Doc
Sat Nov 19, 2016 6:54 pm
Forum: Investing - Theory, News & General
Topic: Why are bonds dropping? They are supposed to be safe.
Replies: 171
Views: 19366

Re: Why are bonds dropping? They are supposed to be safe.

On the other hand, if one owns only bonds, then it would seem that TIPS would be hugely preferred because one can eliminate inflation risk and thereby take on more duration risk. In the '08 Lehman crisis TIPS sucked. Maybe this was a one off, maybe not. In any case my ten year TIPS ladder is now 55...
by Doc
Sat Nov 19, 2016 3:54 pm
Forum: Investing - Theory, News & General
Topic: Why are bonds dropping? They are supposed to be safe.
Replies: 171
Views: 19366

Re: Why are bonds dropping? They are supposed to be safe.

I made a pledge to myself to stop "arguing" with Kevin about the CD/Treasury comparison, BUT ... Kevin's arguments are based on looking at the fixed income portion of the portfolio in isolation. DBR's (and Doc's) arguments take into consideration that the FI is only part of a portfolio tha...
by Doc
Fri Nov 18, 2016 4:04 pm
Forum: Investing - Theory, News & General
Topic: Why are bonds dropping? They are supposed to be safe.
Replies: 171
Views: 19366

Re: Why are bonds dropping? They are supposed to be safe.

Again, a rise in the Fed funds rate isn't the ONLY variable. Fed raised the funds rate 400 bps from 2004-2006, and Total Bond Market Index Fund increased in value over that time period. Maybe, depending on what you mean by "value". The price of VBTLX declined by ~ 2% from 1/1/2004 to 1/1/...
by Doc
Fri Nov 18, 2016 12:11 pm
Forum: Investing - Theory, News & General
Topic: TIPS - Did you give up?
Replies: 445
Views: 53884

Re: TIPS - Did you give up?

dcabler wrote:TIPs do best when there is unexpected inflation.


What if the actual inflation is less than "expected"? That's also "unexpected". And in that case TIPS adjusted prices go down. (See TIPS prices in early part of 2009.)

The market is made up of both buyers and sellers. :D
by Doc
Fri Nov 18, 2016 12:03 pm
Forum: Investing - Theory, News & General
Topic: Why are bonds dropping? They are supposed to be safe.
Replies: 171
Views: 19366

Re: Why are bonds dropping? They are supposed to be safe.

Doc, do you by any chance have any idea what their prediction was back on Monday, 11/7? It would be interesting to know, given the intervening 41 basis point increase in the treasury yield curve's 10-year rate. No, I don't make a habit of looking at this "tool". Sometimes it pops up when ...
by Doc
Thu Nov 17, 2016 5:08 pm
Forum: Investing - Theory, News & General
Topic: Why are bonds dropping? They are supposed to be safe.
Replies: 171
Views: 19366

Re: Why are bonds dropping? They are supposed to be safe.

Fed Open Market Meeting 14 December 2016 The CME Fed Watch Tool is predicting a 90% plus probability of a Fed target target rate rise of 50-75 bps. That's BIG . Actually, the FOMC gets a freebie in December because bonds have already dropped in value. Adding to the drop won't be a big deal. There m...
by Doc
Thu Nov 17, 2016 11:33 am
Forum: Investing - Theory, News & General
Topic: Why are bonds dropping? They are supposed to be safe.
Replies: 171
Views: 19366

Re: Why are bonds dropping? They are supposed to be safe.

Fed Open Market Meeting 14 December 2016

The CME Fed Watch Tool is predicting a 90% plus probability of a Fed target target rate rise of 50-75 bps. That's BIG.

Forecast is based on CME Group 30-Day Fed Fund futures prices.
http://www.cmegroup.com/trading/interes ... -fomc.html
by Doc
Wed Nov 16, 2016 6:00 pm
Forum: Investing - Theory, News & General
Topic: Why are bonds dropping? They are supposed to be safe.
Replies: 171
Views: 19366

Re: Why are bonds dropping? They are supposed to be safe.

But, then there's the premium or discount on par price that it's purchased at; which is lost/gained at maturity. The premium/discount actually gets amortized/discounted (ABP/OID) over the life of the bond. In many cases you will have to pay tax on the OID and take a deduction for the ABP even thoug...
by Doc
Mon Nov 14, 2016 2:23 pm
Forum: Investing - Theory, News & General
Topic: Bond Fund Rated rated to hold low quality. Why?
Replies: 11
Views: 938

Re: Bond Fund Rated rated to hold low quality. Why?

Yeah, I was going that direction myself, but their "credit quality" table just does not match their "sector weightings" table. If they believe that the fund has 48.01% in "U.S. Treasury Inflation Protected" then one of the entries in the "credit quality" tabl...
by Doc
Mon Nov 14, 2016 10:52 am
Forum: Investing - Theory, News & General
Topic: Bond Fund Rated rated to hold low quality. Why?
Replies: 11
Views: 938

Re: Bond Fund Rated rated to hold low quality. Why?

The Nuveen page shows 90% US Treasuries. It also shows 2.9% high yield (aka junk bonds). If you look at M*'s bond rating criteria it weights positions by credit default probability (as well as market weight of course.) So a small amount of low credit retingsecurites has a large effect on the averag...
by Doc
Sun Nov 13, 2016 1:38 pm
Forum: Investing - Theory, News & General
Topic: Reinvest dividends or sweep to settlement account
Replies: 20
Views: 1291

Re: Reinvest dividends or sweep to settlement account

I don't know why this is a hassle at tax time. Unless you are tax loss harvesting , these small lots make no difference. Or maybe I'm just rebalancing or buying a new house or just paying my RE tax or my kid's tuition - whatever. And then you have the separate wash sale accounting to deal with on o...
by Doc
Thu Nov 10, 2016 12:43 pm
Forum: Investing - Theory, News & General
Topic: Tax Efficiency: Bonds or Equities in Roth... not as trivial in low tax bracket and have taxable account?
Replies: 11
Views: 1117

Re: Tax Efficiency: Bonds or Equities in Roth... not as trivial in low tax bracket and have taxable account?

Same words I had written before, but emphasis added this time. For those willing to slice into pieces, tax efficiency improvements can sometimes be made. Actually your prior words were "There are no absolute general statements ." :D But I will accept that your position is consistent with ...
by Doc
Thu Nov 10, 2016 11:54 am
Forum: Investing - Theory, News & General
Topic: Tax Efficiency: Bonds or Equities in Roth... not as trivial in low tax bracket and have taxable account?
Replies: 11
Views: 1117

Re: Tax Efficiency: Bonds or Equities in Roth... not as trivial in low tax bracket and have taxable account?

Stock funds are indeed quite tax efficient in taxable for taxpayers in the 15% bracket, BUT those qualified dividends still contribute to AGI, to MAGI for many purposes, and to "investment income," all of which could potentially disqualify a low income taxpayer for various tax credits and...
by Doc
Thu Nov 10, 2016 10:18 am
Forum: Investing - Theory, News & General
Topic: Bonds are getting crushed...
Replies: 42
Views: 8874

Re: Bonds are getting crushed...

Using long term total return charts to try to determine short term market trends makes for difficult analysis. You have to look at the charts "wiggles" to see anything and that's hard. Instead of a ten year total return chart try looking at a ten month price chart for Total Bond . https://...
by Doc
Wed Nov 09, 2016 2:08 pm
Forum: Investing - Theory, News & General
Topic: Just don't panic
Replies: 61
Views: 8721

Re: Just don't panic

Until Janet Yellen leaves in 2018 it's unlikely interest rate policy will be very different. The Fed was signalling gradual rises, and that's what is likely to happen. Rise perhaps in December or January . The US political system grinds ever slow, no big changes before February . Federal Reserve is...
by Doc
Wed Nov 09, 2016 8:57 am
Forum: Investing - Theory, News & General
Topic: Tax Efficiency: Bonds or Equities in Roth... not as trivial in low tax bracket and have taxable account?
Replies: 11
Views: 1117

Re: Tax Efficiency: Bonds or Equities in Roth... not as trivial in low tax bracket and have taxable account?

grabiner wrote:However, bonds with yields equal to stock yields would have the same tax cost.


David, by "yields" do you mean coupon/dividend or total return? (Some of us are actually going to have to take capital gains at some point.)
by Doc
Tue Nov 08, 2016 1:21 pm
Forum: Investing - Theory, News & General
Topic: The Swedroe 5/25 rebalancing bands restated
Replies: 79
Views: 8789

Re: The Swedroe 5/25 rebalancing bands restated

I'm confused. Is there a "why rebalance" concept going on here? My viewpoint is that rebalancing is to control risk not to maximize returns. Under normal long term conditions stocks are going to outperform bonds and we will be selling stocks and buying bonds to rebalance. This is going to ...
by Doc
Mon Nov 07, 2016 7:43 pm
Forum: Investing - Theory, News & General
Topic: The Swedroe 5/25 rebalancing bands restated
Replies: 79
Views: 8789

Re: The Swedroe 5/25 rebalancing bands restated

The limitations of the relative rule start to appear when an asset class is more than 40% of the portfolio ... It is my understanding that the 25% relative applies only to small positions. The "crossover" point is a 20% portfolio position. Say your portfolio is $100,000 -> a 20% position ...
by Doc
Mon Nov 07, 2016 3:05 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Total Bond - Not reccomended by Swedroe??
Replies: 50
Views: 10292

Re: Vanguard Total Bond - Not reccomended by Swedroe??

I don't understand the issue with MBS in Total Bond. Most of the MBS' are GNMAs. GNMAs are backed by the government. When the sky was falling in 2008, GNMA fund made 7.22% The issue with MBS is the negative convexity. If mortgage rates rise homeowners tend to keep their existing mortgages and if in...
by Doc
Mon Nov 07, 2016 11:36 am
Forum: Investing - Theory, News & General
Topic: Tax Efficiency: Bonds or Equities in Roth... not as trivial in low tax bracket and have taxable account?
Replies: 11
Views: 1117

Re: Tax Efficiency: Bonds or Equities in Roth... not as trivial in low tax bracket and have taxable account?

blastoff wrote:I realize Bonds are less tax-efficient and ...

Not all bonds. Short Treasuries are probably the most tax efficient for many investors. See the Wiki.
https://www.bogleheads.org/wiki/Tax-eff ... _placement
by Doc
Sun Nov 06, 2016 6:49 pm
Forum: Investing - Theory, News & General
Topic: What time of day do you buy/sell International ETFs?
Replies: 13
Views: 1119

Re: What time of day do you buy/sell International ETFs?

I try to buy/sell during the period from 30 minutes after New York opening to 30 minutes before Europe closing. If you go to a site that shows you a real time chart of both the price of an ETF and it's indicative value you will see that they usually track very closely until the European markets clos...
by Doc
Sat Nov 05, 2016 4:43 pm
Forum: Investing - Theory, News & General
Topic: Slipping last few days- time to buy now or wait until after 11/8?
Replies: 99
Views: 10334

Re: Slipping last few days- time to buy now or wait until after 11/8?

livesoft wrote:If one or two states have a close vote, then the election may not be concluded on Tuesday.

Invest in Maalox futures?
by Doc
Sat Nov 05, 2016 2:03 pm
Forum: Investing - Theory, News & General
Topic: Slipping last few days- time to buy now or wait until after 11/8?
Replies: 99
Views: 10334

Re: Slipping last few days- time to buy now or wait until after 11/8?

I only disagree in what you're calling the move. I think I already said that. I think we need a better definition of market timing. If I use your definition of market timing then I market time six or more times a year. That's because I put all taxable dividends into some very short term FI investme...
by Doc
Sat Nov 05, 2016 11:55 am
Forum: Investing - Theory, News & General
Topic: Slipping last few days- time to buy now or wait until after 11/8?
Replies: 99
Views: 10334

Re: Slipping last few days- time to buy now or wait until after 11/8?

I think we need a better definition of market timing. Using some of the ideas presented here rebalancing using bands and tax loss harvesting would be market timing. But rebalancing on a time schedule is not market timing. In my way of thinking market timing is making a significant trade before an ev...
by Doc
Sat Nov 05, 2016 11:20 am
Forum: Investing - Theory, News & General
Topic: Slipping last few days- time to buy now or wait until after 11/8?
Replies: 99
Views: 10334

Re: Slipping last few days- time to buy now or wait until after 11/8?

Neither of those examples is what you described you're doing in the first post about this. In that post, you exactly described juggling assets in anticipation of some market event. That you don't see that and continue to try and justify it is quite telling. Following Livesoft's "backhanded&quo...
by Doc
Sat Nov 05, 2016 9:45 am
Forum: Investing - Theory, News & General
Topic: pre vs. post tax in calculating overall asset allocation (not fund placement)
Replies: 12
Views: 752

Re: pre vs. post tax in calculating overall asset allocation (not fund placement)

Doc, let's make things a bit more complicated. Suppose an investor in the 33% tax bracket (unlikely to have a Roth IRA) has a portfolio that is 50% Traditional IRA and 50% taxable. Only 67% of the funds in the Traditional IRA are available for spending (let's forget about anything passing to issue ...
by Doc
Sat Nov 05, 2016 9:23 am
Forum: Investing - Theory, News & General
Topic: Slipping last few days- time to buy now or wait until after 11/8?
Replies: 99
Views: 10334

Re: Slipping last few days- time to buy now or wait until after 11/8?

Regarding not "not market timing.". Changing your AA, or selling 5 - 10% in anticipation of a bunch of IFs is market timing. No matter how many ways to try to circle around it to justify what you did. I am not changing my AA. I am only juggling the assets within my existing AA in in antici...
by Doc
Sat Nov 05, 2016 9:02 am
Forum: Investing - Theory, News & General
Topic: Slipping last few days- time to buy now or wait until after 11/8?
Replies: 99
Views: 10334

Re: Slipping last few days- time to buy now or wait until after 11/8?

It might be rebalancing. What are your rebalancing criteria? Do you buy or sell every time the market moves down or up? I use a "variable" band criteria. It has two parts. 1) I trigger a rebalancing based on a band around the most recent AA high/low not my target AA. So if my band is 5% a...
by Doc
Thu Nov 03, 2016 2:14 pm
Forum: Investing - Theory, News & General
Topic: Slipping last few days- time to buy now or wait until after 11/8?
Replies: 99
Views: 10334

Re: Slipping last few days- time to buy now or wait until after 11/8?

Regarding "not market timing". Okay?? Whatever one has to tell themselves. If I buy or sell stocks after the stock market move it is rebalancing. Often it's following the crowd (if buying on an up move) or panicking (if selling on a down move). Oops. If I buy or sell stocks after the stoc...
by Doc
Thu Nov 03, 2016 1:46 pm
Forum: Investing - Theory, News & General
Topic: ETF Trading - FIFO Rules
Replies: 4
Views: 501

Re: ETF Trading - FIFO Rules

If your broker allows you to sell specific shares ... The broker doesn't have a choice. (He may however have a default provision if you don't elect something yourself. But he doesn't necessarily have to make that choice easy.) To figure cost basis, you can choose one of the following methods. Speci...
by Doc
Thu Nov 03, 2016 1:38 pm
Forum: Investing - Theory, News & General
Topic: pre vs. post tax in calculating overall asset allocation (not fund placement)
Replies: 12
Views: 752

Re: pre vs. post tax in calculating overall asset allocation (not fund placement)

Rainmaker has a $1000 balance in his 401k and $1000 in his ROTH. If he is in the 25% bracket his AA is 750/1000 or 43/57. The reason is that the $1000 in the 401k is not all his. Twentyfive percent belongs to the Guv because he never paid income tax on it. On the other hand all of the ROTH is his be...
by Doc
Thu Nov 03, 2016 1:25 pm
Forum: Investing - Theory, News & General
Topic: Slipping last few days- time to buy now or wait until after 11/8?
Replies: 99
Views: 10334

Re: Slipping last few days- time to buy now or wait until after 11/8?

Regarding "not market timing". Okay?? Whatever one has to tell themselves. If I am buying or selling selling stocks in anticipation of a stock market move it would be market timing. If I buy or sell stocks after the stock market move it is rebalancing. Moving money from one fix income secu...
by Doc
Thu Nov 03, 2016 10:31 am
Forum: Investing - Theory, News & General
Topic: Slipping last few days- time to buy now or wait until after 11/8?
Replies: 99
Views: 10334

Re: Slipping last few days- time to buy now or wait until after 11/8?

It's always something. Maybe the OP wants to want until after the December FOMC meeting? Following Livesoft's "backhanded" advice, I converted 5-10% of my portfolio from short term corporates to 90 day t-bills. If the stock market goes down I have lots of dry powder to bargain buy (aka re...

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