Search found 1446 matches

by Electron
Thu Feb 11, 2016 2:55 pm
Forum: Investing - Theory, News & General
Topic: Rebalancing, another study
Replies: 127
Views: 9285

Re: Rebalancing, another study

But when using any reasonable variant of rebalancing, same thing, bonus is 0.25% at best. Vanguard published a document recently describing the benefits of their Personal Advisor Services. http://www.vanguard.com/pdf/ISGQVAA.pdf The document shows the benefits of rebalancing as approximately 35 bas...
by Electron
Sun Jan 31, 2016 3:36 pm
Forum: Personal Consumer Issues
Topic: The Big Short
Replies: 137
Views: 13824

Re: The Big Short

Wikipedia has an excellent overview of the movie including the plot and cast. https://en.wikipedia.org/wiki/The_Big_Short_%28film%29 The Big Short Trailer (2015) from Paramount Pictures is available at the link below. A whole series of short film clips are provided in sequence if you watch to the en...
by Electron
Tue Jan 26, 2016 1:35 pm
Forum: Investing - Theory, News & General
Topic: What was the 2000 crash like in real time?
Replies: 65
Views: 5393

Re: What was the 2000 crash like in real time?

The 2000-2002 Bear Market took quite a while to finally bottom. If you look at the charts, the S&P 500 made a very nice triple bottom over a period of eight months. The S&P 500 tested the 800 level in July 2002, October 2002, and finally March 2003. As others mentioned, it was a difficult pe...
by Electron
Sun Jan 24, 2016 4:46 pm
Forum: Investing - Help with Personal Investments
Topic: Wellesley (VWIAX) vs CD for reliable income
Replies: 15
Views: 2810

Re: Wellesley (VWIAX) vs CD for reliable income

In a deflationary period, a long term Treasury bond would provide more stable income than 5 year CDs. The bonds are non-callable and the rate could be locked in for up to 30 years. Note that with Wellesley Income, the return comes from dividends, capital gains distributions, and change in NAV. Welle...
by Electron
Sun Jan 24, 2016 2:24 pm
Forum: Investing - Theory, News & General
Topic: What was the 2000 crash like in real time?
Replies: 65
Views: 5393

Re: What was the 2000 crash like in real time?

The period 1998 through March 2003 was quite unusual. Value stocks really struggled in the late 1990s and even famous value managers were losing clients. Technology and growth stocks experienced a strong rise and peaked at very high valuations. Everything changed after the NASDAQ peak in March 2000....
by Electron
Sat Jan 23, 2016 3:17 pm
Forum: Investing - Help with Personal Investments
Topic: Wellesley (VWIAX) vs CD for reliable income
Replies: 15
Views: 2810

Re: Wellesley (VWIAX) vs CD for reliable income

Here is some data for Vanguard Wellesley Income Fund - Admiral Shares (VWIAX). Yahoo Finance historical data adds any December capital gains distributions to the December dividend. The table below shows the annual dividends only paid from 2006 through 2015. The third column shows the share increase ...
by Electron
Wed Jan 20, 2016 1:34 am
Forum: Investing - Help with Personal Investments
Topic: Wellesley (VWIAX) vs CD for reliable income
Replies: 15
Views: 2810

Re: Wellesley (VWIAX) vs CD for reliable income

A lot depends on your investment time frame. If you are talking about a longer term investment, Wellesley should outperform a Certificate of Deposit but with higher volatility. You may also want to consider the effects of inflation. Here is the Vanguard fund profile for Vanguard Wellesley Income Adm...
by Electron
Thu Jan 14, 2016 5:47 pm
Forum: Personal Finance (Not Investing)
Topic: IRS Form 8606
Replies: 13
Views: 1482

Re: IRS FORM 8606

What makes me sweat is that, unlike the regular record keeping time frame for general returns, the IRS explicitly says IRA records must be kept forever. That is, not just the 8606s, but all the records the financial institutions send you, etc. I had no idea of that back 30 years or so when I first ...
by Electron
Sun Jan 10, 2016 5:21 pm
Forum: Investing - Help with Personal Investments
Topic: Cash-on-the-sidelines thread
Replies: 39
Views: 4515

Re: Cash-on-the-sidelines thread

Investing the cash over 24-36 months does seem like a long period of time. One possibility might be to review longer term charts of the U.S. stock market and then come up with an investing time frame with the best average fit to the periods with negative returns. In the long term, a disciplined appr...
by Electron
Sun Jan 10, 2016 2:36 pm
Forum: Personal Finance (Not Investing)
Topic: IRS Form 8606
Replies: 13
Views: 1482

Re: IRS FORM 8606

It would be interesting to know whether the data submitted on Form 8606 is kept for long periods in a database for each taxpayer. The information might not be accessed for decades when withdrawals are eventually made from a non-deductible IRA. If the information is saved, it could be only from the l...
by Electron
Sun Jan 03, 2016 3:21 pm
Forum: Investing - Theory, News & General
Topic: MM funds responding to the rate hike
Replies: 14
Views: 1466

Re: MM funds responding to the rate hike

The 7 day SEC yield on Vanguard Prime Money Market fund has actually been moving up for quite a while. This can be seen using the Price History Search Tool on the Vanguard site. https://personal.vanguard.com/us/funds/tools/pricehistorysearch?radio=1&results=get&FundType=VanguardFunds&Fun...
by Electron
Mon Dec 21, 2015 2:52 pm
Forum: Investing - Theory, News & General
Topic: Decided to try timing the market. 100% short on 9/17/15
Replies: 332
Views: 36359

Re: Decided to try timing the market. 100% short on 9/17/15

It will be interesting to see how this single trade works out, but I don't think the results of one trade are very meaningful. Timing results are generally measured over many trades. Each sell signal is intended to manage risk and limit losses. Many of those trades will underperform buy and hold. If...
by Electron
Mon Nov 30, 2015 2:50 pm
Forum: Personal Finance (Not Investing)
Topic: When to take RMD - verification
Replies: 26
Views: 2127

Re: same question...different date

This is an old discussion with the same question for a different date. Therefore if someone was born in Nov. 1947, he would be 70 1/2 in May 2018. His first RMD would be between Jan. 1, 2018 and April 1, 2019? His second RMD would be between Jan. 1, 2019 and Dec. 31, 2019? If his first RMD was in 2...
by Electron
Sat Nov 28, 2015 12:28 am
Forum: Investing - Help with Personal Investments
Topic: Cost Basis
Replies: 10
Views: 845

Re: Cost Basis

I'd also suggest checking the cost basis section of your online account. It should show the cost basis for all covered shares and possibly some or all uncovered shares as well. It may show unrealized short and long term gains and losses. Also see what information is provided for each share lot. Toda...
by Electron
Fri Nov 27, 2015 2:38 pm
Forum: Investing - Help with Personal Investments
Topic: Cost Basis
Replies: 10
Views: 845

Re: Cost Basis

It might also help to look at the tax forms that are filed after taking a capital gain or capital loss in any given tax year. In the case of the Federal return take a look at Schedule D and Form 8949. Investors need to keep track of the cost of every purchase including dividend reinvestments. The da...
by Electron
Tue Nov 24, 2015 3:59 pm
Forum: Personal Finance (Not Investing)
Topic: Many Seniors Face Higher Medicare Surcharges
Replies: 8
Views: 2116

Re: Many Seniors Face Higher Medicare Surcharges

The 2016 Medicare Part B costs including Part B surcharges are now available. https://www.medicare.gov/your-medicare-costs/part-b-costs/part-b-costs.html The basic Medicare Premium appears to be either $104.90 or $121.80 depending on the factors listed. I calculated the percentage increase for those...
by Electron
Thu Nov 12, 2015 12:26 am
Forum: Investing - Theory, News & General
Topic: etf yield vs yield to maturity
Replies: 4
Views: 321

Re: etf yield vs yield to maturity

Another factor is that distribution yield includes the effect of expenses while yield-to-maturity does not include any expenses. I brought up a chart on Morningstar earlier showing Vanguard High Yield Corporate and then added four different junk bond ETFs (SJNK, HYS, HYG, and JNK). Vanguard High Yie...
by Electron
Sun Nov 08, 2015 5:08 pm
Forum: Investing - Theory, News & General
Topic: How does call risk affect vanguard muni funds?
Replies: 15
Views: 861

Re: How does call risk affect vanguard muni funds?

It looks like even the popular VWIUX interm term muni fund has a longer avg maturity than duration. Duration and maturity will be the same for a zero coupon bond, but duration will be less than the maturity if a coupon is paid. The effect is higher as the coupon goes up. It is often written that hi...
by Electron
Thu Nov 05, 2015 11:25 pm
Forum: Investing - Theory, News & General
Topic: Buy on Dip/Sell on Rise
Replies: 87
Views: 5313

Re: Buy on Dip/Sell on Rise

Twenty five years ago I tried buying the dip as an experiment and it was successful every time. The strategy was to dollar cost average on a weekly basis following any steep decline and take profits after a reasonable gain was achieved. I had an account at Twentieth Century Investments and bought fu...
by Electron
Sun Oct 25, 2015 3:45 pm
Forum: Investing - Theory, News & General
Topic: What's wrong with this picture - Small Value/Growth
Replies: 67
Views: 3846

Re: What's wrong with this picture - Small Value/Growth

Four comments: 1. A better comparison would be growth versus value rather than growth and value relative to the Russell 3000. 2. The Russell 3000 Indexes are capitalization weighted, so the chart is essentially showing the performance of large cap growth and large cap value relative to the Russell 3...
by Electron
Fri Oct 23, 2015 12:26 pm
Forum: Investing - Theory, News & General
Topic: Mels midcaps on power lunch
Replies: 33
Views: 3769

Re: Mels midcaps on power lunch

It may not make a lot of difference, but be aware that the Vanguard Small and Midcap Index funds have each tracked three different indexes. NAESX - Russell 2000 Index through May 16, 2003, MSCI US Small Cap 1750 Index through January 30, 2013, CRSP US Small Cap Index thereafter. VIMSX - S&P MidC...
by Electron
Thu Oct 22, 2015 6:07 pm
Forum: Investing - Theory, News & General
Topic: Riding the yield curve, in action
Replies: 74
Views: 12157

Re: Riding the yield curve, in action

No, the dollar income from a populated ladder remains exactly the same each year. Kevin - Thanks for the detailed commentary which will take some time to review. Doesn't the dollar income in fact increase for a time after creating a new ladder when the yield curve is positive? Assume that the new l...
by Electron
Wed Oct 21, 2015 1:28 pm
Forum: Investing - Theory, News & General
Topic: Riding the yield curve, in action
Replies: 74
Views: 12157

Re: Riding the yield curve, in action

If Bond Ladder 2 is just Bond Ladder 1 purchased from the original owner, the dollar income will be exactly the same. And the 1-year return of each ladder is exactly the same, since it's the same ladder, and 1-year return is computed the same. The coupon payments are the same (income return), and t...
by Electron
Tue Oct 20, 2015 4:51 pm
Forum: Investing - Theory, News & General
Topic: Dr Bernstein: Limit Muni Bond Exposure
Replies: 90
Views: 9545

Re: Dr Bernstein: Limit Muni Bond Exposure

Illinois, Connecticut, NJ, Hawaii, Kentucky, Louisiana, Maine, Maryland and Mass. And here's another thing, AAA/AA bonds don't default in near term, not in muni land. And we typically don't buy long-term bonds, max maturity being about 10 years. So bonds glide down the path as their credit deterior...
by Electron
Tue Oct 20, 2015 2:54 pm
Forum: Investing - Theory, News & General
Topic: Riding the yield curve, in action
Replies: 74
Views: 12157

Re: Riding the yield curve, in action

You'll get a roll return in the presence of a time-constant upwardly sloping yield curve regardless of whether the bonds are held to maturity or not - just have to "roll" proceeds to maintain average maturity of the portfolio. It may help to limit the portfolio maturity range to the steep...
by Electron
Tue Oct 20, 2015 2:14 pm
Forum: Investing - Help with Personal Investments
Topic: Why Does M* List VSIGX As "High Risk"? [Vg Intermediate Term Bond]
Replies: 12
Views: 1118

Re: Why Does M* List VSIGX As "High Risk"? [Vg Intermediate Term Bond]

I wasn't able to find the duration of the Morningstar Intermediate Government benchmark, but the chart shows an interesting picture. http://quotes.morningstar.com/chart/fund/chart?t=VSIGX&region=usa&culture=en_US If you compare short term price variations in VSIGX versus the benchmark, in mo...
by Electron
Mon Oct 19, 2015 1:17 pm
Forum: Investing - Help with Personal Investments
Topic: Why Does M* List VSIGX As "High Risk"? [Vg Intermediate Term Bond]
Replies: 12
Views: 1118

Re: Why Does M* List VSIGX As "High Risk"?

The key sentence is "An assessment of the variations in a fund's monthly returns in comparison to similar funds". M* does not state the characteristics they look for to define what the "similar" funds are. It seems that they stress past performance only. This would not be helpfu...
by Electron
Sun Oct 18, 2015 4:36 pm
Forum: Investing - Help with Personal Investments
Topic: Why Does M* List VSIGX As "High Risk"? [Vg Intermediate Term Bond]
Replies: 12
Views: 1118

Re: Why Does M* List VSIGX As "High Risk"?

Here is some information on the Morningstar Risk rating. http://quicktake.morningstar.com/datadefs/fundratingsandrisk.html Morningstar Risk "An assessment of the variations in a fund's monthly returns in comparison to similar funds, with an emphasis on downward variation. The greater the variat...
by Electron
Fri Oct 16, 2015 2:51 pm
Forum: Personal Finance (Not Investing)
Topic: Many Seniors Face Higher Medicare Surcharges
Replies: 8
Views: 2116

Re: Many Seniors Face Higher Medicare Surcharges

Has anyone seen information on the Medicare Part B and Part D surcharge amounts for 2016?

As I recall Medicare Part B costs start at 25%. The four surcharge levels for higher income beneficiaries were set at 35%, 50%, 65%, and 80% of the actual costs.
by Electron
Thu Oct 15, 2015 4:44 pm
Forum: Investing - Theory, News & General
Topic: "Vanguard converting mutual fund accounts to brokerage?
Replies: 374
Views: 47450

Re: "Vanguard converting mutual fund accounts to brokerage?

Thanks Doc and JoMoney. At present my account is not eligible for upgrade. I've been looking into the details with another person who is getting ready to proceed. One other question came up regarding Vanguard Mutual Fund statements when held in the brokerage. Are the statements any different? In par...
by Electron
Thu Oct 15, 2015 3:29 pm
Forum: Investing - Help with Personal Investments
Topic: TLH or substantially identical ?
Replies: 23
Views: 1236

Re: TLH or substantially identical ?

The suggestion by Michael Kitces to consider correlation could make sense for a conservative person not wanting to push the definition of substantially identical. Note that he is talking about Mutual funds and ETFs. Personally, I would not feel comfortable with a case where the correlation was 0.99+...
by Electron
Thu Oct 15, 2015 2:59 pm
Forum: Investing - Theory, News & General
Topic: "Vanguard converting mutual fund accounts to brokerage?
Replies: 374
Views: 47450

Re: "Vanguard converting mutual fund accounts to brokerage?

If you proceed with the Vanguard Upgrade, does it apply to all existing accounts and IRAs or can you pick and choose? As an example, a person might want to merge all of their taxable mutual fund accounts into a new or existing taxable brokerage account but leave one or more IRAs alone without creati...
by Electron
Thu Oct 15, 2015 1:52 pm
Forum: Investing - Help with Personal Investments
Topic: TLH or substantially identical ?
Replies: 23
Views: 1236

Re: TLH or substantially identical ?

Here are two very informative articles on wash sales. http://www.forbes.com/sites/baldwin/2012/06/05/wash-sale-trap-what-is-substantially-identical/ https://www.kitces.com/blog/the-wash-sale-problem-when-tax-loss-harvesting-almost-substantially-identical-mutual-funds-and-etfs/ Michael Kitces suggest...
by Electron
Wed Oct 14, 2015 1:53 pm
Forum: Personal Finance (Not Investing)
Topic: A New Reason for Delaying SS
Replies: 76
Views: 8667

Re: A New Reason for Delaying SS

Only half of SS is added to AGI, and the remaining amount is taxed much more favorably than any other source of income other than ROTH, since contributions were taxed when deposited, or low yielding municipal bonds. In addition most States don't tax SS at all, so deduct that percentage from overall...
by Electron
Wed Oct 14, 2015 12:37 pm
Forum: Investing - Theory, News & General
Topic: Riding the yield curve, in action
Replies: 74
Views: 12157

Re: Riding the yield curve, in action

Here is some data from the latest semiannual report for the Vanguard Intermediate Term Treasury fund. The portfolio changed quite a bit compared with the previous report. Note the higher percentage in the 5-7 year maturity range. Date 1-31-15 7-31-15 < 1 year -4.5% -4.4% 1-3 years 0.1% 0.3% 3-5 year...
by Electron
Mon Oct 12, 2015 12:54 pm
Forum: Personal Finance (Not Investing)
Topic: A New Reason for Delaying SS
Replies: 76
Views: 8667

Re: A New Reason for Delaying SS

The Social Security benefit increases 8% per year in the final four years leading up to Age 70. That is hard to beat. Note also that the COLA translates to a higher dollar amount when applied to the higher benefit. If any Roth Conversions are planned, delaying Social Security could result in more sp...
by Electron
Sun Oct 11, 2015 5:57 pm
Forum: Investing - Theory, News & General
Topic: Riding the yield curve, in action
Replies: 74
Views: 12157

Re: Riding the yield curve, in action

Auctions are in general replacing existing issues which are maturing. In recent years, outstanding Treasury debt has increased significantly. The duration of the Aggregate Bond Index was 3.7 in 2009. The duration is currently 5.7 which is quite a large increase. The reason is apparently a large inc...
by Electron
Sun Oct 11, 2015 3:09 pm
Forum: Investing - Theory, News & General
Topic: Riding the yield curve, in action
Replies: 74
Views: 12157

Re: Riding the yield curve, in action

Thanks for the replies MB, Doc, ogd, and Kevin. In reviewing this thread, it appears that bullet portfolios achieve the higher return with income and capital gains. That suggests that the ladder portfolios achieve the higher return with additional income. That makes sense if replenishing duration me...
by Electron
Sun Oct 11, 2015 1:06 pm
Forum: Investing - Theory, News & General
Topic: Why did bonds go up after the last Fed Funds Rate increase?
Replies: 9
Views: 1112

Re: Why did bonds go up after the last Fed Funds Rate increase?

I remember that period and the move up in bond prices did come as a surprise. Commentary at the time suggested that the rise in short term rates would keep inflation under control. In addition, participants felt that the rise in short term rates was coming to an end. You could also research the stat...
by Electron
Sun Oct 11, 2015 12:19 pm
Forum: Investing - Help with Personal Investments
Topic: Fidelity Contrafund?
Replies: 21
Views: 2319

Re: Fidelity Contrafund?

Here are a few comments from Morningstar. Will Danoff started managing Fidelity Contrafund in 1990. Since that time the fund has gained 13.3% annualized versus 10.1% for the S&P 500. The large size of the fund may be impacting performance. Danoff also manages the $6 billion Fidelity Series Oppor...
by Electron
Sat Oct 10, 2015 4:36 pm
Forum: Investing - Help with Personal Investments
Topic: Fidelity Contrafund?
Replies: 21
Views: 2319

Re: Fidelity Contrafund?

The Performance tab on Morningstar provides a good performance comparison with the S&P 500 over the last 15 years. http://performance.morningstar.com/fund/performance-return.action?t=FCNTX&region=usa&culture=en-US The S&P 500 has outperformed Fidelity Contrafund over the past 5 years...
by Electron
Sat Oct 10, 2015 1:33 pm
Forum: Investing - Theory, News & General
Topic: Riding the yield curve, in action
Replies: 74
Views: 12157

Re: Riding the yield curve, in action

This thread and concept must have been an eye-opener for many investors. In looking at the portfolio of Vanguard Intermediate Term Treasury Fund VFIUX, the holdings all have a maturity ranging from 3 years to 10 years. It is easy to see how selling bonds several years before maturity has enhanced th...
by Electron
Wed Oct 07, 2015 1:14 pm
Forum: Investing - Help with Personal Investments
Topic: Yield on Vanguard Int. Term Tax Exempt Fund
Replies: 53
Views: 5507

Re: Yield on Vanguard Int. Term Tax Exempt Fund

I have a question though. Can someone clarify why it's "not possible to buy a dividend if a fund declares daily" if the dividends are paid out monthly? Compare a Vanguard bond fund with any bond fund that includes daily interest in NAV and then goes ex-dividend at the end of the month. Th...
by Electron
Tue Oct 06, 2015 5:22 pm
Forum: Investing - Help with Personal Investments
Topic: Yield on Vanguard Int. Term Tax Exempt Fund
Replies: 53
Views: 5507

Re: Yield on Vanguard Int. Term Tax Exempt Fund

Kevin - Thanks for the detailed analysis which I am still reviewing. I found the yield curve on the Treasury site which is a good reference to bookmark. http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield Your post finally got me to review the Ridi...
by Electron
Mon Oct 05, 2015 2:04 pm
Forum: Personal Finance (Not Investing)
Topic: Roth Conversions - Retired, Single
Replies: 27
Views: 1559

Re: Roth Conversions - Retired, Single

I'll add a comment on Roth Conversions where the taxes are paid from taxable accounts. It hasn't been stated, but most recommendations assume that the taxable assets are invested with the same asset allocation as either IRA. Alternatively, it would be assumed that one's overall asset allocation does...
by Electron
Sun Oct 04, 2015 4:32 pm
Forum: Personal Finance (Not Investing)
Topic: Roth Conversions - Retired, Single
Replies: 27
Views: 1559

Re: Roth Conversions - Retired, Single

Paying Roth Conversion taxes from the IRA and winding up with a smaller balance can still pay off if your marginal tax rate in retirement is higher than the tax rate to convert. It's always helpful to compare the after-tax value of one account versus the other. It's also a good idea to project your ...
by Electron
Sun Oct 04, 2015 2:48 pm
Forum: Investing - Help with Personal Investments
Topic: Yield on Vanguard Int. Term Tax Exempt Fund
Replies: 53
Views: 5507

Re: Yield on Vanguard Int. Term Tax Exempt Fund

The reason for the high coupon is that many bonds which are intermediate-term now were originally issued as long-term bonds; they had higher yields at the time both because long-term bonds originally have higher yields and because interest rates were much higher when they were issued. If you look t...
by Electron
Sun Oct 04, 2015 1:34 pm
Forum: Investing - Help with Personal Investments
Topic: Yield on Vanguard Int. Term Tax Exempt Fund
Replies: 53
Views: 5507

Re: Yield on Vanguard Int. Term Tax Exempt Fund

Did you use a yield curve assumption in your calculations (looks like flat yield curve)? You want to use YTM of a 9-year bond for pricing a year later, assuming a static yield curve (a risky assumption, but you've got to start somewhere). Thanks for your comments. The example I posted did maintain ...
by Electron
Sat Oct 03, 2015 1:17 pm
Forum: Investing - Help with Personal Investments
Topic: Yield on Vanguard Int. Term Tax Exempt Fund
Replies: 53
Views: 5507

Re: Yield on Vanguard Int. Term Tax Exempt Fund

Modeling two bonds in Excel might provide some answers. Here is some data using the Yield and Price functions in Excel. Premium Bond: $110.00, 5.0% coupon, 10 year maturity, yield is 3.789%, pays $4.545 per year on $100 investment Par Bond: $100.00, 3.789% coupon, 10 year maturity, yield is 3.789%, ...
by Electron
Sat Oct 03, 2015 12:16 pm
Forum: Investing - Help with Personal Investments
Topic: VDIGX - help with dividend growth rate per year
Replies: 2
Views: 454

Re: VDIGX - help with dividend growth rate per year

Here is a table showing S&P 500 dividend growth starting in 1989. http://www.multpl.com/s-p-500-dividend-growth/table/by-year The next link shows inflation adjusted S&P 500 dividends from 1871 through June 2015. http://www.multpl.com/s-p-500-dividend/table I read recently that the number of ...

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