Search found 206 matches

by Kelly
Mon May 02, 2016 7:42 pm
Forum: Investing - Theory, News & General
Topic: LifeStrategy Moderate Growth fund or its components?
Replies: 29
Views: 2179

LifeStrategy Moderate Growth fund or its components?

Folks The Vanguard portfolio builder recommended 4 funds which are the exact components and weights of the LifeStrategy Moderate Growth fund . Is there any reason why the LifeStrategy fund wouldn't produce nearly the same results if held in an IRA (assuming the individual funds were rebalanced to ta...
by Kelly
Sun Mar 27, 2016 2:33 pm
Forum: Personal Finance (Not Investing)
Topic: Raid a Roth for second home down payment or US HELOC?
Replies: 4
Views: 559

Raid a Roth for second home down payment or US HELOC?

I could use a second opinion on this. I need to come up with $100k for a down payment on a second house. I can either take this from my Roth (I've met the age and 5 year requirements) or use a home equity line of credit on the primary residence. That rate is 2.4% or 1.68% after tax assuming a 30% co...
by Kelly
Mon Mar 07, 2016 11:44 am
Forum: Investing - Theory, News & General
Topic: Historical capital gains in an index fund?
Replies: 4
Views: 493

Historical capital gains in an index fund?

Does anyone know where I can find the historical distributions of any large cap index fund? Both Morningstar and Vanguard websites only go back a couple of years.

I'm trying to determine how much, if any, long or short term capital gains an index might have distributed.

Thanks

Kelly
by Kelly
Wed Dec 09, 2015 8:35 am
Forum: Investing - Theory, News & General
Topic: Wade Pfau on Reverse Mortgages
Replies: 41
Views: 4279

Re: Wade Pfau on Reverse Mortgages

I work as a fee only (I don't sell anything) CFP. Because I charge by the hour (and don't charge much) I get a lot of middle America, blue collar pre-retirees who will have to rely on either a reverse mortgage or downsize to a condo or rent an apartment. These folks may have $200k or less saved. If ...
by Kelly
Thu Nov 26, 2015 5:54 pm
Forum: Investing - Theory, News & General
Topic: Why do FDIC insured CDs yield more than treasuries?
Replies: 36
Views: 4637

Why do FDIC insured CDs yield more than treasuries?

Folks, A treasury maturing in one year yields 0.48% but Ally bank has a one year FDIC insured CD yielding 1.05%. Unless I'm missing something the risk is the same: none. My guess is that there's simply much more institutional money flowing into treasuries pushing the yield down. If that is the reaso...
by Kelly
Sun Oct 25, 2015 1:09 pm
Forum: Investing - Theory, News & General
Topic: Between rock and hard place in 401k large cap
Replies: 4
Views: 649

Between rock and hard place in 401k large cap

Folks, What's the better of these two bad options for 401k large cap: Principal SP 500 index at 0.70% ER or American Funds Fundamental Investor R (RFNCX) at 0.96% ER (large blend). The American Funds 3 and 5 year returns would be worse than the Principal SP 500. Other time periods it's better. Here'...
by Kelly
Tue Oct 20, 2015 4:31 pm
Forum: Investing - Theory, News & General
Topic: Question about index holdings
Replies: 1
Views: 261

Question about index holdings

Vanguard SP 500 index's top three holdings are Apple, Microsoft, Exxon http://portfolios.morningstar.com/fund/holdings?t=VFINX&region=usa&culture=en-US The value index's top three holdings are Microsoft, Exxon, Johnson and Johnson http://portfolios.morningstar.com/fund/holdings?t=VIVAX&r...
by Kelly
Mon Oct 05, 2015 2:34 pm
Forum: Personal Finance (Not Investing)
Topic: Northwestern Mutual Whole Life Insurance (65 Life)
Replies: 35
Views: 3205

Re: Northwestern Mutual Whole Life Insurance (65 Life)

5) Cash value can be borrowed for whatever you want, whenever you want. The loan is set ~6%, but really it only costs about 2% since the principle that is borrowed will continue to earn interest. You don't really ever have to pay back the loan since the company will just deduct what is owed from th...
by Kelly
Mon Oct 05, 2015 2:26 pm
Forum: Personal Finance (Not Investing)
Topic: Northwestern Mutual Whole Life Insurance (65 Life)
Replies: 35
Views: 3205

Re: Northwestern Mutual Whole Life Insurance (65 Life)

James Hunt is a retired life actuary who evaluates policies for the consumer federation of america. He charges $100 to work out the internal rate of return of the policy and tell you whether it's worth keeping. I would guess it's returning about 4% so you could treat it as part of your bond allocati...
by Kelly
Sun Oct 04, 2015 9:31 am
Forum: Investing - Theory, News & General
Topic: IBT interview with Dr. Bill Bernstein
Replies: 80
Views: 7317

Re: IBT interview with Dr. Bill Bernstein

I'm always hoping BB will write more books. I've read all of his, many twice and 4 pillars more than that. Maybe we can talk him into another addition to the investing for adults series.
by Kelly
Fri Sep 25, 2015 9:43 am
Forum: Investing - Theory, News & General
Topic: Need idea for teen supply demand exercise
Replies: 12
Views: 1190

Need idea for teen supply demand exercise

Folks I'm teaching investing basics at a local high school on Monday. I have an idea that I will relate basic supply and demand to stock prices. I need some form of simple exercise to demonstrate supply and demand. I've found one idea online that involves splitting the class in half and asking one h...
by Kelly
Tue Sep 22, 2015 11:15 am
Forum: Investing - Theory, News & General
Topic: What are the index fund costs beyond bid ask?
Replies: 13
Views: 1044

Re: What are the index fund costs beyond bid ask?

It does seem that Int'l funds are always costlier regardless of size. Any insight? The phone desk at VGD didn't know the full story either. Although, interestingly, he suspected that some of the cost difference may be attributed to the assumption that one index provider cost more than another. Kelly
by Kelly
Mon Sep 21, 2015 10:40 pm
Forum: Investing - Theory, News & General
Topic: What are the index fund costs beyond bid ask?
Replies: 13
Views: 1044

What are the index fund costs beyond bid ask?

My apologies if this has already been covered. If it has I can't find it. The SP 500 (VFINX) has an expense of 0.17%, while the Mid Cap (VISMX) costs 0.23%. Is there anything beyond bid ask to account for Mid Caps higher price? FTSE All World Ex US (VFWIX) cost 0.29%. Are there additional costs beca...
by Kelly
Sun Sep 20, 2015 9:34 am
Forum: Investing - Theory, News & General
Topic: Where can I open orders for APPL?
Replies: 6
Views: 609

Re: Where can I open orders for APPL?

If you're going to teach high school students about basic finance and personal investing, please be sure to impart the principles of living below your means, paying yourself first, investing early and often, and the tyranny of costs. Too many high school classes I've seen emphasize the definitions ...
by Kelly
Sun Sep 20, 2015 7:58 am
Forum: Investing - Theory, News & General
Topic: Where can I open orders for APPL?
Replies: 6
Views: 609

Re: Where can I open orders for APPL?

That was quick! Thanks to you both.

Kelly
by Kelly
Sun Sep 20, 2015 6:31 am
Forum: Investing - Theory, News & General
Topic: Where can I open orders for APPL?
Replies: 6
Views: 609

Where can I open orders for APPL?

Folks

I'm teaching a high school class on very basic stock market and investing concepts. Is there some place I can see all the bid ask offers for APPL in real time? I'd like to get a screen shot of it.

Many thanks!

Kelly
by Kelly
Thu Sep 17, 2015 6:28 am
Forum: Investing - Theory, News & General
Topic: Question for stats folks
Replies: 4
Views: 677

Question for stats folks

I'd like to better understand the FF 3 factor regression. While I was strong in college stats, after 30 years all I can recall is standard deviation, bell curve an some other basics. My question: if I was to get a stats text book what subjects should I study so that I could understand FF regression ...
by Kelly
Thu Sep 10, 2015 5:31 am
Forum: Investing - Theory, News & General
Topic: Looking for list of systematic risk factors
Replies: 7
Views: 636

Re: Looking for list of systematic risk factors

Yes! I read Bernstein's Deep Risk. Excellent! I think the following would cover it but I'm not sure if I'm missing any big ones. These are risks that effect the entire market Inflation Recession/depression Political (changes in corporate tax rates or regulations) Investor psychology (irrational exub...
by Kelly
Wed Sep 09, 2015 4:53 pm
Forum: Investing - Theory, News & General
Topic: Looking for list of systematic risk factors
Replies: 7
Views: 636

Looking for list of systematic risk factors

Folks I can find lists of unsystematic risk factors but not systematic risk factors like recession, etc. I think I'd know one (risk factor) if I saw one but I'd like to find some authoritative list. I'm not talking about Fama French factors but those that cause declines in the overall market. This i...
by Kelly
Mon Sep 07, 2015 7:48 am
Forum: Investing - Theory, News & General
Topic: Morgan Stanley dividend portfolio vs. iShare Select Dividend
Replies: 2
Views: 379

Morgan Stanley dividend portfolio vs. iShare Select Dividend

Folks I was surprised to see that this brokerage portfolio made up of high dividend payers beat the iShare Select Dividend (DVY) and DFA Large Value. Oddly, the brokerage portfolio has less value loading than DVY (assuming I read the factor analysis correctly). Is there anyone good at factor analysi...
by Kelly
Mon Jun 01, 2015 9:56 am
Forum: Investing - Theory, News & General
Topic: Life Strategy fund for retirement?
Replies: 6
Views: 1149

Life Strategy fund for retirement?

A relative who is retiring is asking how to allocate their savings which is all in their IRA. I like the simplicity of Vanguard's Life Strategy Moderate Growth fund which is 60/40. The 5 bps extra cost is not a big concern and probably worth it for this person who isn't going to be interested in reb...
by Kelly
Sun May 03, 2015 7:13 am
Forum: Investing - Theory, News & General
Topic: Annuities: Bad in principle or practice?
Replies: 75
Views: 5204

Re: Annuities: Bad in principle or practice?

I've analyzed a number of indexed and variable annuities. Equity indexed annuities are designed to be sold. With their caps and floors you'll get a bond like return which makes sense since this is what the insurer invests the premiums in. SPIAs have an IRR of about 4% at life expectancy (late 80's)....
by Kelly
Wed Apr 08, 2015 5:38 am
Forum: Investing - Help with Personal Investments
Topic: Required minimum distribution and year end fund distribution
Replies: 29
Views: 2516

Required minimum distribution and year end fund distribution

Am I correct in assuming that it's best, if possible, to delay an RMD until after Vanguard makes year end distributions? Specifically, is it smart to wait until the day after the record date? This assumes that the RMD will be reinvested in a stock index. Are there any other RMD strategies that are u...
by Kelly
Mon Feb 02, 2015 10:54 am
Forum: Investing - Theory, News & General
Topic: Question about dividend strategies
Replies: 17
Views: 1914

Re: Question about dividend strategies

I don't understand his point that investors will bid up the share price after the dividend to fill in the "hole" left in the market cap after the payout. Why would they? Why would they not? Just prior to the dividend the company has potential plus cash; it pays the cash to investors in th...
by Kelly
Mon Feb 02, 2015 9:19 am
Forum: Investing - Theory, News & General
Topic: Question about dividend strategies
Replies: 17
Views: 1914

Re: Question about dividend strategies

I don't understand his point that investors will bid up the share price after the dividend to fill in the "hole" left in the market cap after the payout. Why would they?
by Kelly
Mon Feb 02, 2015 8:01 am
Forum: Investing - Theory, News & General
Topic: Question about dividend strategies
Replies: 17
Views: 1914

Re: Question about dividend strategies

I didn't think it made any sense. The author is describing a market where investors push up the market cap to fill in the hole left by the dividend payout. Why would they? And why are some folks so passionate about dividend payers? It must be some misunderstanding that receiving 3% (along with a 3% ...
by Kelly
Sun Feb 01, 2015 1:55 pm
Forum: Investing - Theory, News & General
Topic: Question about dividend strategies
Replies: 17
Views: 1914

Question about dividend strategies

I recently read this article in seeking alpha (requires registration) http://seekingalpha.com/article/933531-demystifying-the-dividend-illusion In it the author talks about a $100 share that pays a $0.50 dividend. On the ex div date the share price falls to $90.50. So far so good. He then states the...
by Kelly
Sun Jan 18, 2015 9:42 am
Forum: Investing - Theory, News & General
Topic: Sign the fiduciary standard petition
Replies: 0
Views: 308

Sign the fiduciary standard petition

The DOL is going to take another whack at implementing a fiduciary standard. You can sign the petition at this site http://saveourretirement.com/ Background: Thanks to loopholes in the rules that govern advice about retirement investing, banks, brokers, mutual fund companies, and insurance agents ar...
by Kelly
Mon Jan 12, 2015 8:55 am
Forum: Investing - Theory, News & General
Topic: Looking for book on currency exchange rates
Replies: 1
Views: 318

Looking for book on currency exchange rates

Folks, I'm trying to broaden my financial literacy. I'm trying to better understand foreign exchange rates and how these mechanisms work. I'm reading Currency Wars but it assumes that the reader knows at least the basics of international monetary systems. Does anyone know of a more basic book? Kelly
by Kelly
Thu Jan 01, 2015 2:46 pm
Forum: Investing - Help with Personal Investments
Topic: Can annuity withdrawals be rolled to another IRA?
Replies: 2
Views: 304

Can annuity withdrawals be rolled to another IRA?

Someone I know crossed paths with an annuity salesman. They now have a fixed annuity in an IRA and they are still well into the surrender charge period. However, they can take 10% of the value out each year without a surrender charge. He's only 56 so he'd have a 10% penalty if he withdrew it. Does a...
by Kelly
Thu Jan 01, 2015 1:04 pm
Forum: Personal Finance (Not Investing)
Topic: SS benefit for spouse and children at 62
Replies: 9
Views: 786

Re: SS benefit for spouse and children at 62

pshonore wrote:I believe the Mother's (caretaker) benefit stops when the youngest child reaches 16 unless she is otherwise eligible for a spousal benefit.


This is true. If she's working she's subject to the earnings test so she may never get benefits.
by Kelly
Thu Jan 01, 2015 11:52 am
Forum: Personal Finance (Not Investing)
Topic: SS benefit for spouse and children at 62
Replies: 9
Views: 786

Re: SS benefit for spouse and children at 62

He can also file and suspend at his SS full retirement age of 66 and some months (depending on year of birth), allow his own benefit to growth through delayed retirement credits but allow his children under 18 claim their benefit. File and suspend is not allowed until full retirement age. He should ...
by Kelly
Tue Dec 23, 2014 8:51 am
Forum: Investing - Help with Personal Investments
Topic: Fixed Index Annuity Rate Advice
Replies: 8
Views: 1419

Re: Fixed Index Annuity Rate Advice

The "adviser" (I suspect salesman) has you in the fixed account since his commission was higher if he could get you to sign off on this. It's higher since the insurer knows their liability. The market returns most likely have caps like 3-4.5% (the rates you list may be the cap rates but th...
by Kelly
Sun Dec 07, 2014 11:03 am
Forum: Investing - Theory, News & General
Topic: Why do target date funds get so bond heavy?
Replies: 39
Views: 3223

Re: Why do target date funds get so bond heavy?

I read Vgd's target date methodology and it shows that the target date fund attempts to solve for BOTH SPIA and systematic withdrawal. http://www.vanguard.com/pdf/s167.pdf They said that they are trying to solve for a replacement rate from non-Social Security sources of $19,200/yr. They say that it ...
by Kelly
Sun Dec 07, 2014 9:25 am
Forum: Investing - Theory, News & General
Topic: Why do target date funds get so bond heavy?
Replies: 39
Views: 3223

Re: Why do target date funds get so bond heavy?

P.S. It all gets a little silly because if you have, let's say, 30 years until retirement, and you start by investing in a target date fund, the changes are very slow and you have decades to think about it and adjust them to what you learn about your personal risk tolerance. It also gives three dec...
by Kelly
Sun Dec 07, 2014 8:49 am
Forum: Investing - Theory, News & General
Topic: Why do target date funds get so bond heavy?
Replies: 39
Views: 3223

Re: Why do target date funds get so bond heavy?

In addition to Richard's comment, you need to consider the behavioral (or emotional) aspect of investing. How would you feel as an 80 year-old with no human capital left, with 80% in equities during a replay of 2008-2009 - and not knowing if or when the losses will stop? Will you be able to enjoy l...
by Kelly
Sun Dec 07, 2014 8:13 am
Forum: Investing - Theory, News & General
Topic: Why do target date funds get so bond heavy?
Replies: 39
Views: 3223

Re: Why do target date funds get so bond heavy?

A large loss in your portfolio shortly after retirement can devastate the probability of portfolio survival. Yes, I understand this. But, the research has taken that into account. In fact new research shows that a rising equity glide path, starting a number of years after the target date path can i...
by Kelly
Sun Dec 07, 2014 7:54 am
Forum: Investing - Theory, News & General
Topic: Why do target date funds get so bond heavy?
Replies: 39
Views: 3223

Why do target date funds get so bond heavy?

Does anyone know the theory behind target date funds very heavy bond allocation at and after the target date has passed? Vanguard's 2010 fund is 62% bond. Research (Bengen, Pfau, etc) has shown that the safe withdrawal rate in retirement is maximized with a bond allocation of 50% to 70%. See page 12...
by Kelly
Sun Dec 07, 2014 7:34 am
Forum: Investing - Theory, News & General
Topic: New research on funds chasing dividends
Replies: 2
Views: 622

New research on funds chasing dividends

Jason Zweig has an interesting article in the Journal this weekend. He describes how some funds will hold shares for only a few days to capture the dividend. Never hear of this before. Unable to pick stocks that outperform the market, dozens of mutual funds appear to be chasing higher dividend yield...
by Kelly
Wed Dec 03, 2014 8:51 am
Forum: Investing - Theory, News & General
Topic: POLL: Should investors have a separate emergency fund?
Replies: 58
Views: 4430

Re: POLL: Should investors have a separate emergency fund?

I voted no. Folks should have funds in a non retirement account but nothing says it cant be part of the allocation. Some take it to far and keep the emergency funds in cash. Last year the Journal of Financial Planning published a paper showing that a cash emergency fund would have made workers worse...
by Kelly
Fri Nov 28, 2014 5:41 pm
Forum: Investing - Theory, News & General
Topic: Where should I put my req'd distributions?
Replies: 7
Views: 1478

Where should I put my req'd distributions?

Folks, I hold a 60/40 portfolio, all Vanguard, all in an IRA: 15% Total Stk Idx 20% Value Idx 10% Total Int'l Idx 15% Int'l Value Fund 40% Total Bond Idx I don't need my required minimum distributions. If I put them in the Total Stk Index I'll have an annual tax loss of 0.4%=1.82% x (15% + 8%), wher...
by Kelly
Thu Nov 27, 2014 12:45 pm
Forum: Investing - Theory, News & General
Topic: What is the present value of future payments?
Replies: 8
Views: 896

Re: What is the present value of future payments?

I'm trying to simulate how an annuity with a guarantee withdrawal benefit would have performed during period 1968 to 1997. This was the worst retirement period according to the 1992 Bengen study that gave us the 4% withdrawal rate. Unrelated to the OP...how can a study done in 1992 use data from 19...
by Kelly
Thu Nov 27, 2014 10:12 am
Forum: Investing - Theory, News & General
Topic: What is the present value of future payments?
Replies: 8
Views: 896

Re: What is the present value of future payments?

Thanks Bobcat. I'm trying to simulate how an annuity with a guarantee withdrawal benefit would have performed during period 1968 to 1997. This was the worst retirement period according to the 1992 Bengen study that gave us the 4% withdrawal rate. The annuity allows you to withdraw 5% of the account ...
by Kelly
Wed Nov 26, 2014 1:39 pm
Forum: Investing - Theory, News & General
Topic: What is the present value of future payments?
Replies: 8
Views: 896

What is the present value of future payments?

Folks, Can someone please double check my math? Scenario is two streams of income. $1000 per year. One stream is inflation adjusted (real payments) one is a nominal payment. Both go on for 30 years. I assumed each these payments are risk free so the appropriate discount rate is inflation. What is th...
by Kelly
Tue Nov 18, 2014 10:32 am
Forum: Personal Finance (Not Investing)
Topic: legalities of bypass trust funding question
Replies: 6
Views: 847

Re: legalities of bypass trust funding question

The bypass is to avoid MD state taxes at second death. The estate lawyer says we can pick and choose which assets go the trust while the custodian says you can't pick. Rather 50% of each position goes to the trust. If that's the case, the stepped up shares be moved to the trust?

Many thanks

Kelly
by Kelly
Tue Nov 18, 2014 8:59 am
Forum: Personal Finance (Not Investing)
Topic: legalities of bypass trust funding question
Replies: 6
Views: 847

legalities of bypass trust funding question

Folks I bypass trust funding question I can't find the answer to. By way of simple example: couple jointly holds, within a family trust, 100 shares each of company ABC and XYZ which have a combined FMV of $50,000 on the day the husband dies. ABC has a high cost basis and XYZ has a low cost basis. Th...
by Kelly
Fri Nov 14, 2014 11:40 am
Forum: Investing - Theory, News & General
Topic: Taxation of fund dividends
Replies: 3
Views: 523

Taxation of fund dividends

Folks, A relative has the Franklin Income fund (FKINX) which is comprised of value stocks and junk bonds. Templeton told me that the distributions are all dividends and is reported as such on the 1099. Then where is the bond interest going? Why isn't the bond interest broken out on the 1099? Any ide...
by Kelly
Tue Nov 04, 2014 11:22 am
Forum: Investing - Theory, News & General
Topic: Christine Benz Interviews Bill Bernstein
Replies: 33
Views: 4459

Re: Christine Benz Interviews Bill Bernstein

If you want gold just invest in gold itself.


Gold or shares backed by the metal are taxed as collectibles at 28%. Here http://www.bloomberg.com/news/2013-05-21/gold-etf-sellers-facing-tax-surprises-at-28-gains-rate.html
by Kelly
Thu Oct 23, 2014 8:40 am
Forum: Investing - Theory, News & General
Topic: Int'l value fund question
Replies: 3
Views: 587

Re: Int'l value fund question

I meant to say "why is the int'l fund lagging"

Kelly
by Kelly
Thu Oct 23, 2014 7:44 am
Forum: Investing - Theory, News & General
Topic: Int'l value fund question
Replies: 3
Views: 587

Int'l value fund question

In Bill Bernstein's excellent new book Rational Expectations he lists recommended funds. In the international value space he lists: Powershares FTSE RAFI developed markets ex US (PXF) but omits Vanguard Int'l (VTRIX) value and iShares MSCI Value Index (EFV). However PXF has been lagging both. The US...

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